The announcement that Exal Corp. plans to invest $12.6 million to boost its aluminum container manufacturing operation on Wilson Avenue could not have come at a better time for the city of Youngstown.
Declining income tax revenues that have resulted in city government's operating budget dripping red ink, the shut down of the privately owned Northeast Ohio Correctional Center, the permanent closing of Tartan Textile Services and an 81-day strike by nurses from Forum Health have cast a dark financial shadow over the city.
The problems are exacerbated by an anemic national economy which has businesses and individuals reassessing their spending priorities.
That is why Exal's decision to add 66 high-wage jobs over the next four years to its payroll of 108 full-time workers is worthy of attention.
Commitment: The company's long-term commitment to the city is reflected in its decision to buy the building it has been occupying since it began operations in Performance Place Industrial Park in 1993. Exal will pay $3.3 million for the building and, as part of the transaction, will take over the original tax abatement granted by the city to the developer.
In addition, Exal will add 72,000 square feet to the structure so the company can launch a fifth manufacturing line. This segment of the project carries a price tag of $2.8 million.
Finally, the company will invest $6 million in high technology equipment for the new production line. The building will house an additional $500,000 in inventory.
What is most significant about Exal's plans, apart from the fact that they could become a reality by October, is that the company isn't looking for a government loan or grant. Instead, it has applied for a 10-year, 75 percent tax abatement on all real and personal property connected with the project.
Youngstown City Council is scheduled to consider the application at a special meeting later this month. It's an easy call for the lawmakers.
Business sweeteners, such as tax breaks, low-interest loans and free land, are a fact of life in the highly competitive world of economic development. Over the years, Youngstown has used such incentives to great advantage.
Aggressive program: Indeed, under former Mayor Patrick J. Ungaro, the city's aggressive job-creation program not only resulted in more than 40 companies, big and small, creating more than 1,000 jobs, but more than 1,600 jobs were retained.
More important, the Ungaro administration had-- and now the administration of Mayor George M. McKelvey has -- great success creating industrial parks from abandoned steel mill sites. These parks have been a magnet for a variety of companies.
Given that record, the city of Youngstown is justified in contending that it should be one of the first recipients of state dollars generated by a bond issue which Ohio voters approved last year. The restoration of brownfield sites is the main goal of the state initiative.
Exal's expansion plans should bolster Youngstown's case for a significant share of the money being doled out by the Taft administration.